ACOs missing out on millions in payments by not assuming more risk, report finds

Accountable care organizations could have garnered $886 million in additional payments in 2015 if they took on greater financial risk, according to a new report.

Research published by Avalere on Wednesday simulated how ACOs in the Medicare Shared Savings Program would have fared financially in 2015 had they assumed the two-sided risk in the Track 2 model. That’s the track where ACOs can reap more savings but to do so, they also must take on some responsibility for any losses. The majority of MSSP ACOs are in Track 1 where they bear no risk, Avalere researchers noted.

Avalere found that 79% of Track 1 ACOs — or 307 organizations — would have benefitted financially with the Track 2 model. That would include a 5% bonus payment made available to those eligible in the Quality Payment Program. Meanwhile, 21% of Track 1 ACOs would have taken on losses.

While some ACOs would have had to pay the Centers for Medicare & Medicaid Services for losses incurred as part of the program, that financial hit would be covered by the 5% bonus, researchers found. In total, the bonus would have brought a $1.1 billion increase in payments.

CMS has been rolling out new incentives to persuade ACOs to take on more risk in the arrangements, and the new research shows the agency’s efforts might pay off for providers, Avalere noted.

“CMS’ new value-based payment incentives really tip the scales for doctors to assume greater financial risk,” said Senior Vice President Josh Seidman. “For those physicians who were dipping their toes in the water with low-risk ACO models, the incentives now make it advantageous for a majority of them to move more aggressively into greater accountability for population health.”